Saturday, February 27, 2010

Strategic Default Monitor : Latest Updates

Many Borrowers In Default Stay Put As Lenders Delay Evictions. Alana Semuels from L.A. Times writes "[d]espite being months behind, many strapped residents are hanging on to their homes, essentially living rent-free. Pressure on banks to modify loans and a glut of inventory are driving the trend". The primary reasons for this are not as sympathetic as it may seem. Banks do not want to maintain empty properties. By allowing former homeowners to stay, the cost of upkeep and maintenance is shared.

Homeowners Facing Worst Simply Abandon Homes. A news story by Thomas Olson of the Pittsburgh Tribune-Review puts a different spin on strategic defaults by focusing on the emotional costs. While describing the effects of homeowner's walk aways in Pittsburgh, he concludes with the following "Psychologist Rex Gatto, Mt. Lebanon, has counseled about 10 people in the last two years or so who walked away from their homes, 'which I had not seen before in my 25 years of practice,' he said, declining to name patients. 'The outcome is heightened anxiety and often, depression,' he said. 'When people lose their homes they also feel a loss of community and friendships, and if they have kids, a school district... all the things they belong to."